Are Best Buy and Blockbuster getting into video downloads?

Ars Technica is reporting that Lionsgate CEO Jon Feltheimer let slip some information that indicates Best Buy and Blockbuster are going to enter the video download market.

“We have nearly a dozen active agreements in place for digital delivery of our content with such major players as Apple, Amazon, Microsoft, Blockbuster, Best Buy, and Wal-Mart, with more to follow.

All of those companies have active download services – except Blockbuster and Best Buy.

There is another issue – Apple, Amazon, and Microsoft all have ways to display their downloads on a TV. Apple has Apple TV, Amazon has Unbox on TiVo, and Microsoft has the Xbox 360. Wal-Mart currently lacks a solution for watching anywhere but on a computer, and adoption of their service has been slow.

Would Blockbuster and/or Best Buy have a hardware solution to display on TV as well? Or would they be yet another computer-only solution like Wal-Mart, NetFlix, MovieLink, etc? If they have a solution – would they produce their own, branded box? Or partner with someone?

There are potential partners out there. TiVo’s partnership with Amazon is not exclusive, other vendors could partner with TiVo as an additional content source. Perhaps the Sony PS3 or the Nintendo Wii. Sling Media has the SlingCatcher coming, with as-of-yet unannounced content partnerships promised. Personally, I believe a solution for displaying the content on a TV is critical for the success of video download services. And partnering with existing hardware providers is a much better path than producing Yet Another Box to try to sell to people. That business model hasn’t been very successful to date – see Akimbo, Moviebeam, et al.

Since NetFlix has rolled out their online service it is all but inevitable that Blockbuster would do the same. Blockbuster prevaricated a bit:

A Blockbuster spokesperson declined to comment on Feltheimer’s statement. “We intend to offer a movie download service, but we have not provided any details on timing or anything else,” spokesperson Randy Hargrove told Ars Technica. “It makes sense for us to participate in the download space, but we don’t see it becoming a huge business in the next year or two. That said, it’s something we think is important.”

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